Over The Worst? Supply is growing gradually…

The prime London market appears to be seeing a slow return to stability - but average rental growth in the past 12 months has still hit 9.3 per cent. 

According to property data consultancy LonRes, September was the 26th month in a row seeing an annual rent rise.   

This is on top of significant rises over the past two years and takes rents to 31.1 per cent above their 2017-19 pre-pandemic average.  All areas and sub-markets have seen strong growth but prime fringe areas were the best performers for the seventh month in a row, recording an annual rise of 12.5 per cent. 

LonRes says rental demand remains well above previous levels and in general is outstripping supply, but there continue to be small signs that supply is increasing from its low base.  

New instructions in September were 20 per cent higher than the same month in 2022 and there were 56.3 per cent more properties available to let at the end of September than a year earlier.  

Lets agreed fell by 7.7 per cent on an annual basis, 52.2 per cent lower than the average September levels recorded in 2017-2019.  These results come with the caveat that rental demand is so strong that a significant proportion of properties are being let without listing, so are not captured in the data. 

Demand for lower priced rental properties is consistently strong but there is some evidence of weaker demand for higher value homes based on changes in the time on the market data.  

While time on the market has decreased significantly for all price points compared to the 2017 to 2019 average, properties in the £1,000 to £2,000 per week bracket are taking 24 per cent longer to let than a year ago.  By contrast, those under £750 continue to let the fastest.  

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